UK residents can now work more without losing housing support — Govt

UK Flag. Photo: Ballymoney Chronicles

More than 325,000 people living in supported housing and temporary accommodation in the United Kingdom will be able to increase their working hours without facing the previous “cliff edge” reduction in housing support under new rules that came into force on Monday.

The Department for Work and Pensions announced the changes in a statement issued on Monday, October 5, 2026.

The reforms are expected to particularly affect nearly 50,000 young people starting out in employment, who charities said had previously faced difficult financial choices when taking on more work.

Under the previous system, some residents received Universal Credit to help with day-to-day living costs, while their housing support was paid separately through Housing Benefit.

Because the two benefits operated under different earnings rules, some people could see their Housing Benefit reduced more quickly when they started work or increased their hours.

As a result, residents could sometimes be financially worse off despite earning more.

The new rules change how Housing Benefit is calculated for working-age claimants in supported housing and temporary accommodation, bringing its treatment of earnings closer to that of Universal Credit.

Chief Executive Officer of youth homelessness charity Centrepoint, Seyi Obakin, described the change as a landmark development for young people.

He said young people had told the charity they often felt “trapped”, unable to increase their hours, change jobs or build savings without becoming financially worse off.

“From 5th October a young person living in supported housing will keep far more of what they earn, so their extra hours will finally add up,” Obakin said.

He said the changes would allow young people to take on more work and pursue their career goals without facing the previous financial barrier.

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St Mungo’s Chief Executive Officer, Emma Haddad, said the charity had seen cases where people faced having to choose between earning more and keeping their accommodation.

“For many people, work is a way to build up financial resilience and independence and supports with maintaining and sustaining a home,” Haddad said.

She said the previous system could withdraw support so sharply that some residents were left worse off by working more.

The Prime Minister, Andy Burnham, said people should not have to choose between keeping a roof over their heads and being able to work.

“People should never have to choose between keeping a roof over their head or being able to work,” he said.

He said the reforms would help people keep more of their earnings while providing greater financial security.

The Minister for Social Security and Disability, Sir Stephen Timms, said the previous system had discouraged some residents from working and that the changes would ensure that increasing working hours left people better off than remaining on benefits.

The Government said five new earned-income disregards would be introduced for working-age Housing Benefit claimants in supported housing and temporary accommodation.

The disregard values will be updated annually, while the Government said no group would be made worse off by the changes.

The regulations were laid before Parliament on July 6, 2026, and came into force on October 5.